Doing business in the Philippines could be good for Filipinos as it offers unlimited income opportunities and it could be the key to achieving their dream of being rich and wealthy. Businesses and enterprises, whether small or big, could also provide more jobs for many Filipinos, reduce the unemployment rate in the country, and help our economy to grow. However, starting a business in the Philippines isn’t easy and operating it could be harder than you think.
In order to succeed in business and achieve your goals in life, you have to overcome all the big challenges waiting for you when you become a businessman or an entrepreneur. Many Filipinos have failed to start their business because of many reasons. Some of those are the following 6 reasons why Filipinos are discouraged to do business in the Philippines:
1. Business registration and licensing processes are inconvenient. Many aspiring entrepreneurs, especially those who want to start a small business, are discouraged by the several processes of acquiring business registration and licenses in the Philippines. Of course, if you have enough money to spend, you can just hire a professional or a professional firm to delegate these tasks. However, for small business starters, these registration procedures can be costly in terms of money and time. To duly register a business, you have to undergo the registration processes from the DTI, SEC (for partnership and corporation) Mayor’s Office, BIR, SSS, PhilHealth, Pag-ibig, and other government offices your business is required to comply.
The government has already introduced a one-stop-shop business registration system in the Philippines to solve the problem. However, the system is only available in the few cities of Metro Manila but not yet available in other parts of the country.
2. Taxation system in the Philippines is a hassle. Tax is a burden, but taxes are the lifeblood of our country, and everyone should pay their tax dues to the government whether they are employees, professionals, and business owners. It’s not actually the payment of taxes that discouraged Filipino business owners, but it is the burdensome procedures that most small business owners can hardly comply of. Small business owners usually can’t afford to hire a bookkeeper or accountant to help them comply with all the accounting and taxation requirements of the BIR. Consequently, instead of starting a business, they just stick into employment where their income tax can directly be withheld by their employers and remit it to the government.
3. Employment offers a more secure income. Doing business may give you unlimited income opportunities, but that takes time. During the starting year or years of operating a business, losses are ordinarily suffered by business owners. And if you don’t have a clear business plan or strategy, you might just continue on losing. On the other hand, when you are hired as an employee and you got a nice job with your employer, you receive a fixed salary regardless of the financial condition or performance of your company. You do not share on the business losses incurred by your employer.
4. They lack financial capital to start their business. Professionals may start a service firm in the Philippines without investing money on purchasing inventories since, as service providers, they are already the products themselves. But not all entrepreneurs are service providers. Most of them want to enter into merchandising and manufacturing businesses. And without the capital to acquire the machinery and equipment needed to manufacture products or the fund to acquire their merchandise to sell, they can’t go into business.
Some aspiring entrepreneurs also don’t have properties they can use as collateral to obtain loans from banks and other financial institutions. Consequently, they stop their plan of going into business. Some Filipinos decide to work abroad just to save more money they can use for a business startup, thereby suspending their plan to start a business now.
5. They lack the skills and experience to manage a business. Putting our money in our own business is perhaps the riskiest investment we can make, especially if we don’t know how to handle a business. It is riskier than investing our money in a mutual fund or in the stock exchange where businesses are managed by seasoned experts and professionals. Thus, many Filipinos, especially those who don’t have the required knowledge, discipline, and passion for entrepreneurship, don’t attempt to enter into business.
6. They can’t get the support they need from the people around them. Finally, many Filipinos are discouraged to do business because they are discouraged by people who surround them. These people include their family members, friends and even the society. Unfortunately, the business culture in the Philippines is not that strong compare to other countries. Many Filipinos are more attracted with the fixed and secure salaries offered by employment. Only few are really passionate and ready to take the difficult challenges in business. There are also many Filipino parents who want to see their children securely employed in a company rather than seeing them trying hard to establish a business.
The Philippine government and our leaders should do their best to promote business and entrepreneurship in the Philippines. Small and medium business owners may not be considered as heroes of our nation despite of all the sacrifices they made to contribute to the growth of our country, but they need some attention to gain support and hear their voice. Our government should do something significant to lessen those things that discourage them in establishing their enterprise on their homeland. Our society should also realize that our aspiring Filipino entrepreneurs, who are passionate to help our country grow, needs more support rather than discouragement.